1. Technical Field
This invention relates to a coupon management system. In particular, the invention relates to a method of crediting coupons to a consumer, utilizing an electronic reader for reading scannable data and comparing the scannable data with a database of purchased products for crediting the coupons against the total price of the purchased products.
2 Description of the Related Art
The world of product marketing is highly intense and competitive, with the understood intent to increase the gross sales of a given product. Among the many calculated strategies manufacturers utilize to this end is the dissemination of xe2x80x9ccents-offxe2x80x9d coupons. In the marketplace, the coupon has become a popular means of advertising a product. The coupon is used to stimulate consumers to purchase products by providing the consumer with a financial benefit, creating product awareness, prompting product trials, and rewarding repeat product purchases. This technique benefits all parties concerned, the manufacturer, the retailer, and the consumer. The manufacturer gains as his product is publicized and the coupon, upon redemption, provides a means for tracking customer tastes and reactions. Information can be correlated with other marketing data to develop a customer profile for intelligent analysis of product promotions. The retailer is happy as consumers comb his store in search of the item being discounted. And, of course, the thrifty consumer is the most eager of all as he saves some money at the check out. The coupon itself has many inherent benefits.
The most common form of a coupon is the retail, paper product coupon. Each coupon has printed thereon an alphanumeric identification. The alphanumeric identification, or coupon code, has no inherent information. A database must be utilized to get any desired information from the code. The information available is the manufacture and family of a particular item, a description and an amount by which to decrease the retail price of the item, an expiration date, and other useful codes that identifies the coupon. On January 1997 the coupon code was extended by the Uniform Code Council, Inc.(UCC). The extension enables manufacturers to put more information into coupon codes such as special offer codes and household or area ID codes. Currently, there are three coupon code databases one can access for a small fee.
While many customers are inclined to utilize coupons, the process of clipping and saving these coupons tends to be time-consuming and cumbersome. The process begins when the manufacturer decides to print and distribute coupons for one of its products. Consumers receive these coupons through a variety of means, with the most prevalent being the Free Standing Insert (FSIs). The use of the paper coupon requires the consumer to sit down each week, examine coupon FSIs, and cut out the coupons they want to use. Even when not required to cut coupons, some consumers consider coupons too much trouble to constantly organize and carry about. While many companies sell coupon organizers, coupon categorizers and coupon alphabetizers, these methods still require coupon clipping, constant coupon organization, and maintenance (removing expired coupons). It should be no surprise that the vast majority of coupons in FSIs each week go unredeemed.
Even after the consumer reaches the supermarket with his coupons, there are further problems with the present paper-based system. The most common system of redeeming coupons requires a paper coupon to be presented to a cashier when the consumer is checking out. The check-out clerk, to whom a coupon is presented, manually looks over the coupon. This not only wastes precious check-out line time as the clerk must carefully look over the coupon, but also reduces accuracy of the operation. Examples of potential error may include overlooking an expiration date, or overlooking the exact product specification for which the coupon is valid, i.e. only a certain size package may be stipulated on the coupon. Then, the cashier scans the coupon bar code with a scanner associated with the cash register and the cash register software identifies whether the coupon corresponds to an item just purchased. Also, when the consumer has numerous coupons, the individual examination and scanning of each coupon can be very time consuming, delaying all other consumers waiting in line.
This delay is greatly exacerbated when the cash register indicates that no corresponding product has been purchased for one or more of the coupons, stopping the transaction. To discover why a coupon is not appropriate, the cashier must examine the coupon and then review the cash register receipt to determine what aspect of the purchased product does not meet the coupon redemption requirements. In the case where the cashier desires to accept the inappropriate coupon as a customer service gesture, the cashier must xe2x80x9coverridexe2x80x9d the cash register""s rejection of the coupon. Typically this requires the pressing of several additional keys on the cash register. When this entire process must be repeated for multiple coupons not accepted by the cash register, which is common in the majority of transactions in which coupons are used, the delay disrupts the entire checkout process and negatively affects transaction speed, customer service, and front-end productivity.
Further problems and inefficiencies in the coupon redemption process arise after the retailer has accepted the coupons from consumers. In order for the retailer to be reimbursed by the manufacturer, the retailer must determine the total value of each manufacturer""s coupons the retailer has redeemed. Due to the large volume and diversification of coupons handled by most merchants and the large number of manufacturers, it is often more efficient to employ a third-party coupon processing service or clearinghouse.
At the clearinghouse, the coupons are received from many retailers, pertaining to a multitude of manufacturers. An operator at the coupon processing service will manually handle each coupon, scan or manually enter the U.P.C. code, and sort the coupons by manufacturer. Typically, the sorting and counting work is done out of the country, where it may be done more economically. Then, the results are returned to the U.S. for billing the manufacturer and crediting the retailers. Sometimes the manufacturer may again sort the coupons using its own employees or another clearinghouse to insure all the coupons are the manufacturer""s and check for signs of fraud. This process is fairly labor and time intensive.
The process is completed for every one of the billions of coupons redeemed annually. By the time the coupons have been collected by the retailer, passed through one and possibly two clearinghouses, and the manufacture reimburses the retailer, several weeks or months may have passed. The result is a considerable disadvantage to the retailer since the time between when the retailer gives the consumer the coupon discount and when the manufacturer reimburses the retailer is, in effect, an interest-free loan to the manufacturer. As would be expected, this very loose loop inevitably results in the retailers claiming they are under-credited, and the manufacturers claiming over-billing.
The manufacturer also suffers from the slow redemption process. The manufacturer cannot determine the effect of a coupon promotion until the manufacturer receives information on the number of coupons redeemed. Therefore, due to the current time intensive process, it is impossible for a manufacturer to quickly react to product performance, coupon redemption rates, or market changes.
In addition to the legitimate redeeming process being cumbersome, the conventional system is subject to abuse. Unfortunately, because redemption coupons frequently have a cash redemption, there exists wide spread problems with fraudulent misredemption and malredemption. Misredemption occurs where a retailer accepts a coupon for a product that has not been purchased. The situation may arise where retailer personnel may accept large numbers of coupons that are not closely related to the products bought by the consumer. In such a case, the manufacturer eventually (whether initially or through an invoice reduction by the retailer following a manufacturer""s refusal to pay) reimburses the retailer while receiving no corresponding benefit in sales. Some misredemption occurs internally by retail employees, and is fought by the retailer. In other cases, the retailer is intentionally involved in misredemption to increase profits. Misredemption can run into the double digits for retailers, and manufacturers are plagued with the costs of paying for and preventing it.
Malredemption is another type of coupon fraud often practiced. Malredemption is the large scale submission of redemption coupons directly to the manufacturer for reimbursement of the coupons without the product having ever been purchased. Typically malredemption is carried out by illegitimate retailers acting as a xe2x80x9cfrontxe2x80x9d for persons who have set up mass coupon clipping systems. Because of the difficulty in correlating the number of available redemption coupons with the specialty items sold, the conventional system is subject to manipulation. Together misredemption and malredemption cost manufacturers hundreds of millions of dollars annually. Fraud prevention by manufacturers requires large financial resources for the staffing of coupon fraud reduction departments.
It is not suggested that coupons should be eliminated but the current process must be changed. It is widely considered to be inefficient and is an easy victim of redemption fraud. Manufacturers print and distribute billions of paper coupons a year, and the redemption rate is very low. Also, manufacturers must spend hundreds of millions each year just to combat redemption fraud. Due to the tedious nature of the current process, it is suggested that a different system should be developed in which discounts can be applied to various products in a more economical and efficacious process. The industry needs to find a way to make the system more efficient, and to improve low redemption rates. The industry also needs to alleviate the cumbersome redemption process as well as reduce security and fraud problems.
Recently, a number of systems have been developed which address the problem of coupon redemption. One type of system is an electronic in-store coupon issuing and redeeming system that avoids the necessity of printing and collecting paper coupons. However, inventions such as this are limited only to the store they are located in. The user cannot organize the coupons at home or plan a shopping trip based on available coupons. In addition, the user will not know what is on sale until they get to the store. Also, inventions such as these do not utilize FSIs and require the customer to still clip, and organize other coupons. These types of inventions fail because they do not take advantage of currently available coupons.
Another type of invention utilizes a scanner device to allow a user to scan product bar code information from current coupons into a scanner device. This enables the user to take advantage of currently available FSI coupons as well as organize all the coupons the user has scanned. However, these devices have failed because they do not recognize the coupon UPC code or coupon code has no inherent information in itself. A coupon code has the manufacturer id, family code, value code and other such codes. These codes have no inherent information and must be referenced to a database in order for more user friendly information to be obtained.
Some inventions of this nature failed simply because the coupon code is never processed. The scanned information is never compared to a database. Consequently, the user is never provided with any feedback as to the nature of the information stored in the scanner device. Further, there is no way of looking through the stored information to determine which coupon items have been scanned into the scanner device.
Other inventions purport to have the database stored in the scanner and the necessary information is obtained from the database in the scanner. The problem with such an invention is the limited storage capacity of the scanner and the extremely large, almost always dynamic, database of coupon codes. Such inventions do not provide for a feasible way to update the database. Further, most of the previous inventions failed to take any kind of fraud prevention measures. In addition, on January of 1997, a new extended UPC code was introduced. So far, no coupon system has been introduced to take advantage of the new extended UPC code.
There is, therefore, a need for a personal data collector device which allows a user to enter product code information from coupons into a memory device, and receive feedback about the nature of the information stored in the memory device. There is also a need for such a device to provide a user with the ability to interactively manage the list of items stored in the memory device.
It would be extremely desirable to a product manufacturer, if a redemption coupon presented to a potential purchaser was directly correlated with the purchase of an item that is the subject of the coupon. Such a system would help eliminate the potential for abuse and permit redemption of only those coupons that are actually exercised by a consumer. Also, a system which effectively combines the capability of scanning coupons with means for receiving, marking and retaining such coupons so that they cannot be further used would provide important advantages in facilitating the handling of such coupons, regardless of whether they are returned directly to a manufacturer or issuer, or whether they are sent to a coupon redemption center. Additionally, an electronic system that provides both for the display of the electronic coupon and the electronic issuance and redemption of such coupon can wholly avoid the necessity for printing and publishing coupons in material form and the attendant expense of such printing and distribution.
In order to meet one or more of the identified objects, the present invention includes a method and system for electronically managing and redeeming coupons. The system includes a coupon scanner that a consumer will obtain. The consumer will connect the coupon scanner to a cradle, which will upload coupon information via the Internet or similar data connection highway from a server that contains the coupon information. During this process, the coupon information is marked with a unique personal identifier that will electronically stamp the coupon information with the personal information about the consumer. This will allow every coupon redeemed to be traced from its origin through its redemption. Once the consumer has uploaded the coupon scanner with the desired coupon information, the Consumer takes the coupon scanner to a retail store and redeems the electronic coupons at check-out through a point of sale cradle, which is located at the check-out stand of the retail store.
The point of sale cradle will upload the electronic coupon information and personal information about the coupon scanner owner. The retail store has a server that stores the data received from the point of sale cradle. At a regularly scheduled interval, the retail store can upload its coupon data to a centralized coupon clearinghouse in order to redeem its coupons from the product manufacturers that issued the coupons. The data can also be used by a parent store to determine how much money particular manufacturers owe its chain of stores.
The coupon scanner will contain routines to make the use of coupons much easier for the consumer. One such routine computes the consumer""s cost savings based upon coupons used at various intervals, such as monthly or annually. Another routine allows consumers to scan items at home or at the supermarket and search for coupons for that particular product. Yet another routine allows the user to view all coupon records stored in the coupon scanner with a selected letter of the alphabet. This enables consumers to find coupons much easier based upon the manufacturer or the brand names. Other routines are available for the coupon scanner and will be described in greater detail below.
The method and system of the present invention as well as other features, advantages, benefits and objects thereof over other methods and systems known in the art may be better understood with reference to the detailed description which follows.